Oracle Sued for $150 Million for Lost Commissions

SAN FRANCISCO — Sanford Heisler, LLP, along with co-counsel from Kastner Kim LLP, have filed a class action lawsuit in U.S. District Court in San Francisco against Redwood City-based Oracle, alleging that the Silicon Valley giant has stiffed its sales employees of millions in earned commission wages by retroactively changing commission contracts. The complaint alleges that Oracle retroactively increases quotas or decreases commission rates on past sales in order to pay sales employees less than what their existing compensation plans require. The lawsuit, Johnson v. Oracle America, Inc., seeks unpaid commission wages and waiting time penalties and requests an injunction and other relief on behalf of a class of California sales employees.

The class alleges that Oracle “re-plans” employees to reduce commissions earned on completed sales going back to any time of Oracle’s choosing. When it “re-plans” employees after commission wages have already been paid, according to the complaint, Oracle claws back prior payments by withholding newly earned commissions until the employees have paid the company back. The complaint also describes Oracle’s retroactive re-plans as a willful and systematic scheme designed to align commissions with financial forecasts and bottom line goals.

By reducing and withholding commissions in such fashion, according to the complaint, Oracle’s commission policies and practices violate numerous California Labor Code requirements and have resulted in damages of over $150 million to California employees over a four-year period.

David Sanford, chairman of Sanford Heisler and counsel for Plaintiff and the class, noted, “Oracle proudly touts itself as ‘treating each employee… fairly and with dignity.’ We look forward to having a California jury determine whether Oracle lives up to its ideals, or, in fact, betrays them.”

Plaintiff Marcella Johnson claims she was a typical sales employee subjected to a retroactive re-plan that reduced her commission payments. Oracle demanded that Johnson pay back a substantial amount of her earned commissions that had been paid before the re-plan. “The lawsuit we have filed today contends that Oracle has essentially confiscated significant amounts of commission dollars from its salesforce by retroactively changing the terms of commission contracts at will. We believe such a practice is grossly unfair and violates California law,” said Daniel Qualls of Kastner Kim, one of the lawyers representing the Plaintiff.

“California law does not allow a company to point to fine print that supposedly allows it to reduce commissions after the fact,” said Xinying Valerian, Senior Litigation Counsel at Sanford Heisler. “We think all employers should honor the commission formulas that they have provided sales employees and be held accountable for paying employees the commission they have earned.”